FY24/25e to come in as expected // FY25/26 with growth; chg.

Decent current trading. Hoenle looks set to report preliminary FY24/25 figures next week (final figures due on January 29th). For Q4, we expect sales to come in at € 23.2m with and EBITDA of € 2.2m, ultimately meeting the mid to upper ends of the company’s FY guidance (€ 92-94m sales and € 5-6m EBITDA) at € 93m (-5.8% yoy) and € 5.8m EBITDA, eNuW. In particular, the implied margin of above 9% underpins the company’s successful efforts to right-size expenses but it also reflects the business’ seasonality. The FY margin looks set to improve by 3.1pp yoy to 6.2% despite challenging end markets with cautious order behaviour, the key reason for the full year’s lower top line figure.

FY25/26 to return to growth. Despite ongoing uncertainties across the group’s key end markets, we expect Hoenle to grow sales by 8% yoy to roughly € 100m next year. With this, the company would return to growth following three consecutive years with a declining top line. This should be carried by further improvements of the Disinfection business, which already grew 6% during 9M 2024/25 thanks to good demand from several product groups, including ballast water and food industry. Further, across the group new product offerings, such as ultra-pure water (Disinfection), LED-based UV curing, In-situ UV dosage measurement (both Curing) should continue to gain traction.

At the same time, the EBITDA margin should also further improve (+1.2pp yoy to 7.4%) thanks to an improving product mix, a better fix cost coverage and the recent cost saving initiatives. However, this margin increase looks set to be slower than we had initially expected (eNuW old: 9.9%) as Hoenle is seen to face higher initial expenses (vs. our expectations) related to those new products, e.g. R&D, sales, etc.

Importantly, the mid- to long-term prospects remain unchanged. Until 2029/30e, we expect the EBITDA margin to gradually increase to 15% with sales of € 137m (6% CAGR).

Conclusion: Hoenle’s mid-term prospects remain bright, carried by the already ongoing strategic transformation. Mind you, the company already successfully divested the unprofitable sun simulation business, reduced SG&A expenses and is beginning to gain traction with new solutions. We hence confirm our BUY rating with a new € 15 PT (old: € 16) based on DCF.